“Secured lending in [London and the south east] makes up around 55pc of the overall market. Moreover, the south is where the bubble is and will hurt the banks the most,” said analyst Chirantan Barua at Bernstein Research.

“We will see what happens on June 23, but our short on the UK goes much beyond Brexit – stamp duty, rise in unemployment, end of quantitative easing, Chinese capital controls, offshore account scrutiny etc. Trough-to-peak, prices in the south have increased nearly 60pc while wages have hardly moved. Quite clearly, this isn’t a short-term, event-driven issue.”

Banks rely on strong house prices to spur demand for mortgages from buyers and to act as a security buffer against those mortgages - if prices fall, then the banks' safety net is diminished.

Falling interest rates are also a problem for banks, because it means they make less money on the loans they give out. Average rates on new mortgages fell to a record low of 2.41pc in April, in part due to fresh competition from new banks that have entered the market in recent years, but also because the Bank of England is not expected to hike the base rate until the end of this decade.

At the same time, banks can no longer cut costs by squeezing savers as interest rates on deposits are already negligible.

If house prices begin to fall, Mr Barua believes Barclays and HSBC will be particularly affected because their mortgage lending is so focused in London and the south east.

Those banks are, however, also relatively diversified – HSBC has major operations around the world and Barclays has a large investment bank - insulating them from jitters in the housing market.

Lloyds, on the other hand, could be harder hit as it is entirely focused on the UK and 65pc of its loans are British mortgages. RBS is also vulnerable and could see its share price weaken if the market turns.

“UK bank investors would be wise to get out if there were to be a pop, given the housing market has not one but a motley collection of headwinds going against it for the next two years,” Mr Barua said.

However he believes Standard Chartered’s shares could perform better. The UK-headquaertered bank focuses on emerging markets, rather than the British market.

Bernstein has a target price of 600p on the bank’s shares, compared with their current trading level at 522p.